Tax Planning Memo

Decent Essays
Now that we have converted the sole proprietorship to a s-corporation, the tax planning and strategic planning must be the next topic to address. Since Mr. Jones does not have a spouse, he must consider Mandy as the heir to business and his estate. The Current value of his estate is 53 million dollars. He currently wants his daughter to control 40% of the business and be employed by the business. This memo will discuss the following topics: tax planning, strategic planning, estate planning, transfer of assets and selling the business. Now that s-corporation has been established, successful planning must be a serious consideration for Mr. Jones business. “Under the American Taxpayer Relief Act that was passed in 2013, the s corporation get an exemption from the…show more content…
Jones could do is transfer his interest to his daughter. "Working a firmly held business as a S organization can help with family progression arranging. Besides, the exchange of an enthusiasm for a S partnership can likewise help both domain expense and salary assess arranging. For instance, to lessen the extent of one's domain for home expense purposes, a S organization shareholder may exchange his or her stock to another, normally more youthful, relative. This is a decent home duty arranging strategy since it will lessen the bequest impose, and in addition guarantee that the business remains under your preferred control of somebody. Obviously, the beneficiary must be somebody met all requirements to be a S corporate shareholder so as not to coincidentally end the S corporate status." (Fausett, N. 2008.) To avoid any tax implications to his daughter, Mr. Jones must transfer all the assets to the corporation. Under IRC 311, the s corporation is responsible for the gain of the assets above the fair market value and not Mandy individually. If or when the assets are sold, Bob and Mandy would be responsible for the capital gain on the sale of the
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